Gold Stock Analyst - Annual Investor Day

Transcription

1 Gold Stock Analyst - Annual Investor Day NYSE MKT: XPL TSX: SLR February 24, 2013

2 This presentation includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Solitario, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Development of Solitario s properties are subject to the success of exploration, completion and implementation of an economically viable mining plan, obtaining the necessary permits and approvals from various regulatory authorities, compliance with operating parameters established by such authorities and political risks such as higher tax and royalty rates, foreign ownership controls and our ability to finance in countries that may become politically unstable. Important factors that could cause actual results to differ materially from Solitario s expectations are disclosed under the heading "Risk Factors and elsewhere in Solitario s documents filed from time to time with Canadian Securities Commissions, the United States Securities and Exchange Commission and other regulatory authorities. This presentation contains estimates of mineralized material based upon measured, indicated and inferred mineral resource categories that are recognized and required by Canadian regulations, but the SEC does not recognize them and U.S. reporting companies are normally prohibited from including resource estimates in their U.S. filing. U.S. investors are cautioned not to assume that any part, or all, of mineralized material or mineral resources categories will ever be converted into reserves. The economic significance of Proven and Probable Reserves differ substantially from mineralized material and measured and indicated mineral resources. Furthermore economic viability has yet to be established by a feasibility report for mineralized material and the Company has not yet determined that any part of the mineralized material can be legally mined. This presentation also contains information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties. NYSE MKT: XPL TSX: SLR 2

3 Mt. Hamilton Gold Project: U.S. Production on the Horizon Robust economics: $575 operating cash costs $72 million capital cost Measured and 751,000 AuEq; 154,000 AuEq Feasibility and Plan of Operations completed; permitting advancing Wheeler Ridge drilling planned mid-2013 Bongará High-Grade Zinc Project: World Class Zinc Asset Prefeasibility underway; feasibility in 2014 $10 million in partner funding in 2013; 25,000 meters of drilling Solitario s 30% interest funded to production by partner Votorantim Metais High Impact Exploration Potential Pedra Branca PGM NPI-Royalty structured joint venture with Anglo Platinum Pachuca silver-gold project in world s largest silver district NYSE MKT: XPL TSX: SLR 3

4 Issued & Outstanding Shares: 34.4 million Options: 2.5 Warrants 1.6 Fully Diluted Shares: 38.5 million Market cap: $59 million Total net cash and securities: $ 7.0 million Unused credit facility: 2.5 Total: $ 9.5 million Listings: NYSE MKT: XPL; TSX: SLR Management holdings: 11.4% NYSE MKT: XPL TSX: SLR 4

5 NYSE MKT: XPL TSX: SLR 5

6 Feasibility Study and Plan of Operations completed in 2012 Robust economics; development-stage gold project Open pit/heap leach Excellent potential to increase resource base Solitario owns 80% interest and is the project manager Permitting activities in progress in mining friendly Nevada NYSE MKT: XPL TSX: SLR 6

7 Feasibility (SRK): completed in 14 months Q Funding to construction: completed $15 million in financing - June 2012 $10 million from sale of 2.4% NSR-Royalty to Sandstorm Gold - August 2012 $5.0 million from a secured credit facility with RMB Resource expansion (M & I): nearly doubled since acquisition 410,000 AuEq - Q ,000 AuEq - Q (42% increase) 751,000AuEq - Q (29% increase) 70-hole program recently completed Wheeler Ridge drilling Q NYSE MKT: XPL TSX: SLR 7

8 NYSE MKT: XPL TSX: SLR 8

9 NYSE MKT: XPL TSX: SLR 9

10 NYSE MKT: XPL TSX: SLR 10

11 NYSE MKT: XPL TSX: SLR 11

12 Looking NW and down NYSE MKT: XPL TSX: SLR 12

13 NYSE MKT: XPL TSX: SLR 13

14 Keep NEPA Permitting Process on Track for a Record of Decision in H Initiate Drilling at Wheeler Ridge (mid-2013): Excellent Potential - Never Drilled Optimize Production Rate Potential to Increase Feasibility Rate by 15-20% Construction Financing NYSE MKT: XPL TSX: SLR 14

15 One of the world s largest undeveloped zinc deposits Solitario carried to production (30%) with no participation in any funding costs until cash flow is achieved Joint ventured with Votorantim Metais world s 5th largest zinc producer with a zinc smelter in Peru Advanced exploration project approaching $60 million in partner investments (+400 drill holes; +100,000 meters) Mineralized material: 16.0 million tonnes at 7.9% zinc plus 1.3% lead and 0.4 opt silver NYSE MKT: XPL TSX: SLR 15

16 Mine Production: Initial production of 1.0 million going to 1.5 million tonnes per year Concentrate: 108,000 tonnes Zn; 16,000 tonnes Pb; 400,000 oz Ag Recoverable Ore Value: ~ $175/tonne at $1.00/lb Zn & Pb; $25/oz Ag Costs: Second quartile of world zinc productions costs First Mine Production: 2016 NYSE MKT: XPL TSX: SLR 16

17 Work Completed Feasibility: Pre-feasibility 2013; Feasibility completion 2014 Access Road: 15 km completed; 17 km planned for 2013 Underground Workings: 700 meters completed in ; 1000 meters planned for 2013 including new second tunnel Drilling: 23,000 meters surface / underground completed in 2012; 25,000 meters surface / underground planned for 2013 Metallurgical Testing: positive results 93% recovery Permitting - Social Engagement: positive, work continues NYSE MKT: XPL TSX: SLR 17

18 NYSE MKT: XPL TSX: SLR 18

19 NYSE MKT: XPL TSX: SLR 19

20 Ready for joint venture Property situated around one of the world s greatest silver districts - Past production: 1.4 billion ounces of silver and 7.0 million ounces of gold Recent drilling and surface work in the Pachuca Norte area confirms similar mineralization to the historic district 13,500-meter drilling program recently completed with high-grade results NYSE MKT: XPL TSX: SLR 20

21 NYSE MKT: XPL TSX: SLR 21

22 * * Silver Equivalent: 1.0 g/gold equals 50 g/silver NYSE MKT: XPL TSX: SLR 22

23 One of the most advanced PGM projects in South America Joint ventured with Anglo Platinum (51% interest earned) world s largest platinum producer Solitario substantially carried to production with Anglo Platinum funding next $7.0 million and Solitario s share of construction financing Advanced exploration project with $12 million in past exploration expenditures (318 drill holes) Potential for 2 million ounces of platinum-palladium 2013 program: $1.5 million NYSE MKT: XPL TSX: SLR 23

24 Esbarro Pit Design Geologic resource estimation, preliminary metallurgical testing and initial infrastructure scoping underway Anglo Platinum has funded $10.0 million in expenditures to date Major geophysical program in 2013 to define new targets NYSE MKT: XPL TSX: SLR 24

25 Mt. Hamilton Gold Project - Significant future cash flow - Outstanding resource growth potential - NPV ($1,700 gold): $261 million (5% discount rate) - Demonstrated financeability Bongará Zinc Project - Project development accelerating - Emerging as a world-class zinc project - Financed to production by Votorantim Metais Diversified pipeline of projects Long history of minimal share dilution Experienced management and exploration team NYSE MKT: XPL TSX: SLR 25

26 Corporate Headquarters: 4251 Kipling St., Suite 390 Wheat Ridge, Colorado Telephone: Website: Executive Officers: Christopher E. Herald, CEO James R. Maronick, CFO Walter H. Hunt, COO Stock Exchange Listings: NYSE MKT: XPL TSX: SLR Investor Relations: Debbie Mino-Austin Director Investor Relations slrxpl.com (U.S. & Canada) (001) (Int l) Analyst Coverage: Northern Securities Inc Roth Capital Partners, LLC Brian W. Post, Research Analyst NYSE MKT: XPL TSX: SLR 26

27 Zinc production currently in surplus with large zinc inventory... But By 2015 significant depletion of existing zinc reserves and mine closures Zinc mines tend to be small compared to copper Long lead time for startups no major new discoveries Capital investment in new zinc projects virtually non-existent... Setting the stage for a much higher zinc price by 2014 NYSE MKT: XPL TSX: SLR 27

28 NYSE MKT: XPL TSX: SLR 28

29 NYSE MKT: XPL TSX: SLR 29

30 NYSE MKT: XPL TSX: SLR 30